BMW, Toyota lift auto industry spirits

August 4, 2009
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, FRANKFURT, Aug 4 – The world\’s top carmaker Toyota posted improved results, BMW returned to profit and Germany reported surging car sales on Tuesday, further signs that the troubled industry may have turned a corner.

The day after US giant Ford recorded its first increase in sales for almost two years, BMW said it had made a net profit of 121 million euros (174 million dollars) in the three months from April to June, well above forecasts.

Germany\’s auto industry federation VDA said new car registrations in Germany have jumped by 27 percent this year compared to 2008, although the rise was mainly due to a government bonus scheme and car exports were down 12 percent.

Japan\’s Toyota Motor also confounded predictions by logging a net loss of 77.8 billion yen (817 million dollars) for the April-June quarter — leaving it still deep in the red but much better than forecasts of a 200 billion yen loss.

Neither BMW nor Toyota said that the results indicated the auto industry was out of the woods, but they sounded cautiously optimistic.

"Even though some indicators suggest that the economic situation might improve in the second half of the year — we remain cautious," BMW chairman Norbert Reithofer said in a statement.

In the first three months of the year, BMW had posted a net loss of 152 million euros. The new figure, while back in the black, was 76 percent less than the 507 million euros profit it posted in the same period in 2008.

An average analyst forecast, compiled by Dow Jones Newswires, had predicted BMW was on course for a loss of 25 million euros.

Citing "an increasingly competitive environment" and "high volatility of international financial and raw materials markets," BMW did not give a detailed outlook for this year.

However it repeated that it expected 2009 sales to be lower than in the previous year, before picking up in 2010 following the roll out of new models.

Car sales in Germany — Europe\’s biggest car market — have received a major boost from a massive state subsidy that could run out this month.

The market "stabilised further," the VDA auto industry federation said, with dealers selling 2.4 million vehicles since the start of the year.

"This trend, along with orders for 487,000 vehicles, give us confidence," VDA president Matthias Wissmann was quoted by the statement as saying.

The auto industry was one of the first to be hit by the global economic crisis because of a collapse in demand from consumers and it is now being closely watched by economists as an indicator of recovery.

In Japan, Toyota managing director Takahiko Ijichi meanwhile said that government subsidies and tax cuts had helped an improvement in domestic sales.

Toyota, which last year suffered its first annual loss, now expects to sell 6.6 million vehicles in the year, up from a previous goal of 6.5 million.

It narrowed its annual net loss forecast to 450 billion yen from 550 billion and trimmed its operating loss projection to 750 billion yen from 850 billion.

"The current situation is still very severe. We can\’t be sure whether (the market) will enter a sustainable recovery," Ijichi told reporters.

Government incentives helped Toyota\’s revamped Prius hybrid become the top-selling car in Japan in May and June.

The glimmers of hope at Toyota contrasted sharply with its fellow Japanese firm Yamaha Motor Co. which said its loss in 2009 would be more than four times bigger than expected because of sluggish motorcycle sales and a strong yen.

Yamaha forecast a net loss of 182 billion yen (1.9 billion dollars) for its business year through December, the first such shortfall in 26 years.

While Asian sales have been relatively robust, demand for motorcycles and other key products has been sluggish in Europe and the United States, "with no sign of recovery in sight," Yamaha said in a statement.

A US bonus scheme helped Ford Motor Co. report Monday its first increase in sales in almost two years, posting a 2.3 percent rise in total sales in July to 165,279.

Chrysler Group reported a nine percent drop in total US auto sales in July to 88,900 vehicles but said retail sales were up by 52 percent thanks to the "cash for clunkers" trade-in programme.

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